Dynamic Pricing isn’t a “Laser”

Let’s talk about dynamic pricing.

Why? Because it confuses people. These people include consumers (as we saw with the Oasis thing recently) and ticket sellers.

Dynamic pricing just means ‘maybe we’ll change the price of this later.’

Consumers get confused by this because the term only seems to get used when somebody’s charging them a lot more than they expected. When a store does a big discount on some item, that’s “dynamic pricing” too, but it doesn’t get called that. It gets called a “sale.”

Ticket sellers get confused too, and that’s more important for what I’m talking about. Some people are smart users of dynamic pricing, and it’s just fine. It helps a lot.

But most of the gains from pricing when it comes to ticket-selling isn’t from “dynamic” pricing. It’s from what I call variable pricing. That means pricing closer to the true value of the ticket in advance. It’s very logical and few customers would complain. It’s more expensive to see a game on a Saturday night than a Tuesday afternoon. Or if the opponent is Man City instead of Clown Town FC. Tickets closer to the pitch are more expensive than ones in the rafters behind a load-bearing column.

In my experience (2,000,000 events or so), 80% or more of the value to be gained in pricing is in the variable part. The “dynamic” part, where the price is changing faster and later, can definitely add revenue.

BUT…

if handled poorly, it accounts for a disproportionate amount of confusion and fan anger.

Straight up, most organizations don’t do a great job on either one. My least favorite scenario though is organizations that skip the variable pricing work, and want to go pedal-to-the-metal on dynamic pricing.

It won’t work well. It will baffle and infuriate fans, and it probably won’t be maintained in the long run.

Do the work on the foundational variable pricing first. It will pay off for years. It will make sense to everyone and lead to good habits.

If you want to do the advanced course later, that’s fine. Just don’t skip the prerequisite!